25th September 2009 Minutes for the Freshfel/SHAFFE Citrus Teleconference of 25 September 2009 Introduction: A declaration was made by all participants that the discussion will by no means involve matters or topics which could influence market prices or volumes and that the exchange of data and information is strictly limited to matters which do not interfere with competition or anti-trust legislation. The minutes and data from the meeting will be made publicly available on the Freshfel and SHAFFE websites to ensure the transparency of the discussion also for non-members. This discussion is in line with the EU Commission (DG AGRI) policy on market transparency and information. A presentation with detailed data was submitted to participants prior the teleconference to facilitate the discussion. The presentations included consolidated data for the northern and southern hemisphere season developments as well as country specific information where provided. The teleconference reviewed first the forthcoming northern hemisphere production forecasts, followed by a review of the main markets for citrus fruit, and was completed by a review of the southern hemisphere producing countries. Participants included trade representatives from Russia, UK, Germany, Spain, Benelux, as well as suppliers from Italy, Cyprus, Israel, Morocco, Turkey, China, Argentina, South Africa and Australia. Input has also been received from the USA and Spain. Northern Hemisphere Forecast: The following charts provide a summary of the production forecasts for the northern hemisphere: TOTAL CITRUS 2007/2008 2008/2009 2009/2010 (08/09)/(09/10) SPAIN 5.334.228 6.743.011 5.400.746-20% CYPRUS 136.600 109.200 112.000 3% ITALY 3.542.800 2.682.920 3.652.120 36% GREECE 1.049.210 897.500 969.000 8% MOROCCO 1.239.000 1.360.000 1.275.000-6% TURKEY 2.413.000 2.500.000 2.723.000 9% EGYPT 2.795.000 2.515.500 2.645.000 5% ISRAEL 547.000 568.000 560.000-1% BASIN 17.056.838 17.376.131 17.336.866-0,2%
ORANGES 2007/2008 2008/2009 2009/2010 (08/09)/(09/10) SPAIN 2.705.000 3.462.571 2.528.273-27% CYPRUS 29.200 23.360 24.000 3% ITALY 2.527.500 2.490.900 2.550.000 2% GREECE 930.500 802.000 860.000 7% MOROCCO 732.400 790.000 780.000-1% TURKEY 1.173.000 1.173.000 1.173.000 0% EGYPT 1.800.000 1.620.000 1.700.000 5% ISRAEL 115.000 173.000 140.000-19% BASIN 10.012.600 10.534.831 9.755.273-7,4% EASY PEELERS 2007/2008 2008/2009 2009/2010 (08/09)/(09/10) SPAIN 2.040.000 2.229.626 2.029.473-9% CYPRUS 61.300 49.040 50.000 2% ITALY 702.700 527.000 702.700 33% GREECE 64.910 58.500 62.000 6% MOROCCO 471.600 531.000 460.000-13% TURKEY 495.000 600.000 550.000-8% EGYPT 660.000 594.000 625.000 5% ISRAEL 133.000 130.000 150.000 15% BASIN 4.628.510 4.719.166 4.629.173-2% LEMONS 2007/2008 2008/2009 2009/2010 (08/09)/(09/10) SPAIN 543.034 1.000.000 800.000-20% CYPRUS 17.500 14.000 15.000 7% ITALY 546.600 655.920 655.920 0% GREECE 46.500 30.500 40.000 31% MOROCCO 35.000 39.000 35.000-10% TURKEY 500.000 527.000 700.000 33% EGYPT 335.000 301.500 320.000 6% ISRAEL 64.000 45.000 55.000 22% BASIN 2.087.634 2.612.920 2.620.920 0,3% GRAPEFRUITS 2007/2008 2008/2009 2009/2010 (08/09)/(09/10) SPAIN 46.194 50.814 43.000-15% CYPRUS 28.600 22.800 23.000 1% ITALY 0 0 0 GREECE 7.300 6.500 7.000 8% MOROCCO 0 0 0 TURKEY 245.000 200.000 300.000 50% EGYPT 0 0 0 ISRAEL 235.000 220.000 215.000-2% BASIN 562.094 500.114 588.000 18%
An overview of the provisional northern hemisphere production forecasts was made. Several countries data still needs confirmation in the coming weeks when forecasts will be finalised. Overall production is expected to be very close to last season, with only a 0.2% fall. Within this figure, oranges production is supposed to decrease by 7.4% and soft citrus production by 2%, whilst lemon and grapefruit production are expected to increase by 0.3% and 18% respectively. Italy: Orange and easy peeler production in Italy are predicted to return to levels of two years ago after a tough season last time around. Lemon production is expected to stay at levels of last year, which was a strong year for Italian production. Israel: Oranges are expected to be below last year s levels, but above those of two years ago. Easy peelers should increase up to 150,000T this season, a 15% improvement on last year s levels, which should lead to higher levels of exports, although this will remain to be seen as the season develops. Grapefruit production is expected to decrease by 2% compared to last year, however lemons will be up by around 10,000T to 55,000T, a 22% increase, with good size fruit. Spain: Spanish production is expected to fall overall by 20% for the forthcoming season, with respectively 27% and 9% decreases for oranges and easy peelers. Lemons and grapefruit forecasts are also down on last year s production, with 20% and 15% decreases. It is pointed out that the total output available for export is likely to be similar as last year despite the lower crop. Impact of trade of a lower production is therefore likely to be minimal. Rain at the current moment could lead to better sizes this season. Cyprus: The season is set to start in mid-october, slightly behind the normal schedule. The situation for irrigation water is better than last year, however there is still a shortage. Growers hope to maintain production levels and stop the decline seen previously. Turkey: Orange production in Turkey is predicted to stay at exactly the same levels as last year, while easy peeler production is predicted to fall by 8% to 550,000T, which should yield around 350,000T of exports. Lemon production is set to rise by at least 30% to around 700,000T, whilst grapefruit production is expected to jump by 50% to 300,000T, although some problems with sizing are expected. Morocco: The production forecast will be released early October. In the meantime, it is already anticipated that fruit bearing for clementines will be normal, however a small decline of production is expected in the Berkane area (-10%), while a sharp drop is expected in Nour given alternate bearings (-40%). For oranges, volumes of production might be very similar to last year. It is expected that the rain could stimulate the sizes, which have remained an issue. USA: The initial crop report for the USA is expected to be released on the 9 th October. Initial impressions are as follows: In Florida orange production is predicted to decline by around 5%, with tangerines and grapefruit also declining. In California, navel oranges are set to increase by around 5%, with more clementine and late mandarin acreage leading to higher production levels. No major changes are expected for grapefruit, whilst lemon production is likely to be hit by the lack of rain, leading to over 10% reduction. In Texas, droughts are set to reduce production by between 5 and 10%. China: This season s pomelo harvest is set to be strong, with reports of 30% more fruit on trees and good sizing thanks to rain and favourable weather conditions, which is also likely to lead to early harvests. Although much of the fruit is destined for the internal Chinese market, exports to Eastern Europe should again be strong, although there are some issues with MRL.
Market Situation: Russia: The market was stable for lemons in the first half of the season, with moderate volumes from Argentina, and South Africa supplying good volumes. Consumption levels were good with stable prices. Prices increased at the end of August, although quality decreased as the Western European market demand increased. The first lemons from Turkey arrived this week, with good quality and competitive prices. South African lemons are practically finished for this year. The only grapefruits on the market have been from South Africa, without any competition, although the market fell at the end of July and still has not recovered. Quality of stock is variable, and so are prices. Mandarins have followed the tendency of grapefruit, with a good early part of the season, and then a fall in mid-july has only just recovered. Fruit is exclusively from Argentina at the moment, with low prices at the moment but more recovery expected. Moroccan fruit is expected to arrive in week 42. Oranges however have had a very stable season when compared to the last two, with most of the fruit from South Africa. The relatively low prices have prevented fruit from Argentina and Uruguay from competing on the market. Europe: The problem for summer citrus has been the economic situation, with cheap produce further pushing down prices. Buyers have been more price conscious than usual. The large summer fruit volume which has been available has pushed citrus out of the main retail space, and has been considerably cheaper than citrus fruit. The lemon market has been very stable with decent prices, and no oversupply issues. The small sizing of navels has been very present, as the market has been undersupplied significantly. Import volumes of navels have been far down on those seen last year, with higher prices. The grapefruit has been very tough, with a lot of fruit from South Africa. Consumption levels have stayed very low, although the market reacted to this very late, meaning there was a lot of excess supply on the market. Quality has been bad, as have prices and returns for growers. UK: The market has been characterised by stability. Supply and demand for oranges has been well matched, with markets looking strong through to November when SH stocks should be finished. The season has not been great for grapefruit, with weak demand, and a gap left available for forthcoming fruit from Israel and Cyprus. Lemons have enjoyed a good season, with short trade volumes, strong prices, a settled market and normal levels. Soft citrus has also been good, with the market already set for Spanish and Moroccan fruit. Spanish fruit is set to leave for the UK next week. Germany: Demand for oranges has been stable across the whole market. For lemons, the price of Argentinean fruit has decreased, and the market is expecting fruit soon from Turkey and Spain. Ellendales are finished for Argentina, although more fruit is available from Uruguay. Southern Hemisphere fruit has had limited problems with MRL, although five pesticide compounds have been found on some shipments, when supermarkets generally insist on less than this, which has caused some problems. 2.4 D is of particular concerns as some shipments exceeded specific requirements of German supermarkets. This might have indirectly an impact as well on trends. Spain: The market is strong at the moment, with people actively looking for fruit due to the lack of SH fruit. Prices have been very variable while the markets have been very sensitive. There has been no demand for lemons, with people buying only when absolutely necessary. Traders are awaiting the impact of the first navelinas. Grapefruit volumes have also been limited, with Spanish grapefruit not yet on the market. Southern Hemisphere situation: Argentina: It has been a very good year for lemons, with smaller exports but more fruit going for processing, and prices staying strong. It has also been a strong season for mandarins. Valencias have
had a good season, despite the late start due to the Spanish crop, with Russia taking good volumes at the moment. Grapefruit has been a disaster, with less volumes and very bad prices. Next season is looking mixed, with very dry weather in the North-West, where grapefruit and Valencias are grown, meaning volumes will be less and fruit will be smaller. However, the North-East has been very humid, which is good news for orange and mandarin crops. Australia: It has been a good year for volumes, despite smaller navel sizes this year. Easy peeler exports were up to 12,000T this year, 2000T more than last, although lemon exports have fallen by 60% to 300T. The easy peeler season has finished, with Lane Late varieties finishing in the next couple of weeks in the South and already done in the North. Prices have been deflated for most of the navel winter season, following the reduction fuel and oil prices. Domestic transport has also been expensive. Valencias are due to start in 5 weeks, with exports generally being less than that of navels. South Africa: It has been a tough season, with markets not performing as well as had been hoped. There has been a shift of fruit away from the EU to Russia, the Middle East and Far East. Total exports should finish at around 80 million 15kg cartons, 11/12% down for citrus on last year when exports were at 90 million. Navels have been 10% down, valencias 12% down with not enough fruit on the trees despite good sizing. Lemons are 14% down, with the first flush of lemons for the season not coming through well enough, and the season generally following this trend and finishing poorly. Grapefuit has been on an on-year, with good volumes seen. Exports in next year s off-year should be lower. Easy peelers are 8% down on the previous year, with clementines 20% down. More mandarins have been planted this year instead of early clementines. Growers are closely following market developments to hopefully sell fruit well. Uruguay: Apologies were given from SHAFFE President Ms Marta Bentancur who was unable to attend the teleconference. +++++++